Business Diary: January 9-14

COMPANIES On the Job Front, Three Steps Back, One Forward The drumbeat went on last week. Like crazed dieters, companies kept vowing to cut thousands of jobs. Gillette said it would cut 2,000, or 6 percent of its total, though it said it was "acting from strength" amid record profits. Then Westinghouse's new chairman, Michael Jordan, said that as part of a sweeping set of changes -- what one analyst called "cleaning all the cobwebs out" -- he would lay off 3,400. And GTE, the largest local phone company, said it would cut 17,000 jobs -- more than 14 percent of its worldwide total. But in the midst of this all-too-familiar chorus, there appeared a welcome voice -- one big company would be adding, not subtracting. Tandy said that as part of a plan to open 30 computer and consumer electronics superstores, it would hire 3,600 people. Can it be that the end of "downsizing" is in sight?

A Quiet Week for Takeovers It was a fairly quiet week in merger land. (Was it the weather?) Macy's chairman, Myron Ullman, vowed to keep Macy single despite Federated's advances. He could do it, by finding another buyer or paying Federated off. But bankrupts can't be choosers; other creditors may see economies of scale in a merger. . . . Meanwhile, all of Viacom's fancy footwork in eloping with Blockbuster -- to get more cash to buy Paramount -- may have been for naught. Paramount's board urged shareholders to spurn Viacom and embrace its rival, QVC. Will this ever end? Maybe on Feb. 1, now the "final" deadline for bids. Stolichnaya? Absolutely Be honest now: Do you buy the ad or the product? People may say they're not swayed by ads, but that's nonsense: Just look at Absolut. Most people would be hard-pressed to tell one vodka from another, but Absolut's ads have made it an astounding success. Much credit goes to Michael Roux, head of Carillon Importers, but on Feb. 1 he loses Absolut to another distributor. So must the man who helped redefine vodka drown his sorrows in gin? No. Last week Carillon got the rights to Stolichnaya. Vodka wars, here we come. It Talks! It Drinks! It's an Ad! Picture the frazzled jet-setter, taking a respite from her advertising-saturated existence, ducking into a favorite nightspot. Surely she's safe from marketers here. Nearby, a man orders, of all things, a martini made from Hennessy cognac, and when the bartender balks, the man -- shocked, shocked, at such unworldliness -- details how to make it. Yes, you guessed it. He works for Hennessy's distributor, which -- in marketers' parlance -- wants to create a new "usage occasion" for cognac. So, that's it: you're not safe anywhere. That couple at the restaurant oohing and aahing over their dish? Your 10-year-old son relishing a certain cereal? All, perhaps, Madison Avenue's emissaries. I.B.M. '94: Just a Place to Sit It's the ultimate corporate status symbol: the headquarters castle lording over vast grounds so pampered that a fallen leaf is nabbed within moments of its trangression. But it's also a symbol of another age, an age top-heavy with managers issuing orders to scattered troops. An age without the personal computer. Now I.B.M. is facing new realities. With one executive defining I.B.M.'s needs in sadly humble terms -- "There will have to be someplace for Lou Gerstner, me and a few other people to sit" -- it is considering giving up its regal Armonk, N.Y., headquarters. But do princes exist who could fill such castles? USA Today. A Profit. Period. 1 Underscoring the fact that old habits die hard, some readers have never taken USA Today seriously, insisting that any news worth the telling be told in 44-word sentences, each with six verbs and an introductory phrase hammering the reader with the underlying significance. No more. USA Today has arrived. "McPaper" made a profit last year. Its first ever. After losing $600 million in a decade. Gannett started it in 1982. Now people buy it. Daily circulation: 1.5 million. Second only to The Wall Street Journal. Advertisers like it. It pushed color. Now everyone's got color. Even you-know-who. Enough said. THE ECONOMY Inflation? Not Last Year Rarely has there been so little inflation -- and so much talk about it. Economists snatch up each tea leaf, wondering at which moment the recovering economy will revive the dread menace. But for all the flutters and brief alarms, inflation just isn't there. Government figures last week put December's rise in consumer prices at 0.2 percent, holding the year's inflation to 2.7 percent, the lowest in seven years. One key factor: while medical costs are still rising fast, last year's increase, 5.4 percent, was the smallest since 1973. . . . And, yes, the economic news is unremittingly upbeat. Just the latest sign: figures showing December retail sales up 6.9 percent from 1992. And those weren't just disposables, but weightier items like cars and appliances. The Stock Market Loves It The stock market just loves economic might mixed with low inflation. The Dow soared on Monday, tiptoed back, then dashed ahead again on Friday, to a record 3867.20. There's a sense, though, that after a long rally it's on a tightrope -- that any slight change in that mix could knock it off its perch. But for now, fingers are crossed, buy orders flowing. Yes, Time to Talk Health Care Well, it's starting: the Great Health Care Debate. It could make the budget and trade battles look like dinner-table banter. Last week the A.M.A. laid out 37 changes it wants in the Clinton plan. No, it wouldn't deny anyone care -- "All medical societies are in favor of universal coverage." But limits on fees? Cuts in Medicare payments? The A.M.A. says no. Senator Howard Metzenbaum called for resisting the demands, saying the A.M.A. sees reform "as a potential bonanza." But its lobbyists must be reckoned with. But Can It Peer Into the Soul? The words were a stark, refreshing contrast to the usual measured statements of bureaucrats -- "Beyond our wildest dreams"; "All I can say is 'Wow!' "; it's "operating like a dream"; "We are a can-do agency." But the feat was extraordinary: mending the $1.6 billion Hubble telescope in mid-space. Last week NASA pronounced the repairs a total success, and had pictures to prove it. In fact, NASA now says the '94 Hubble is even better than the original would have been. It can see things 10 billion light years away (or what was there 10 billion years ago, at any rate). A Gift of Books, and More At first glance it would seem that when the designer Bill Blass gave $10 million to the New York Public Library last week, it was a vote for old-style communication in an age when technology seems to be leaving books in the dust. Growing up, he said, "books and the local library were an important part of my life." But a closer look at the gift, one of the library's largest, shows it is very much of this age. Half the money will go toward technology and services that will, among other things, help people use the Internet. INTERNATIONAL Brace Yourself: B.C.C.I. Is Back The B.C.C.I. scandal is so convoluted that even the most concerned citizen would be forgiven for wishing it would all just disappear, unresolved. For a while, it seemed to -- except for the ill-fated charges against Clark Clifford and Robert Altman. But the biggest bank fraud ever -- when B.C.C.I. was shut down in 1991, $20 billion had disappeared -- is not about to die away quietly, and last week investigators made a deal that could cast a bright new light on the affair. Swaleh Naqvi, a top B.C.C.I. officer, will be extradited to the United States from Abu Dhabi to face fraud charges, and prosecutors will get access to bank records. In return, Sheik Zayed bin Sultan al-Nahayan, Abu Dhabi's ruler, is off the hook. Now someone has to start reading a million pages of documents -- not, clearly, written with USA Today-type brevity. A Tough Call on China On the world stage, does Bill Clinton want to be the human-rights President or the trade President? Both, of course. But on China, he may be forced into a difficult choice. Yes, during the campaign (or should everything said during a campaign be stricken from the record?), he criticized George Bush for "coddling" China's leaders. But as President, Mr. Clinton would dearly love more trade. So in the fall he gave China a chance to shape up before he cut off preferential trade status. But last week came word that a draft State Department report says China has not make enough human-rights progress. Soon, Mr. Clinton may have to make that choice. Nissan and Ford Needed No Help Score one for the private sector. Even as the United States and Japan are deadlocked in their talks on getting more Japanese dealers to carry American cars, Nissan said last week that its largest dealer, Tokyo Nissan, is planning to sell cars made by Ford.

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A version of this article appears in print on January 16, 1994, on Page 3003002 of the National edition with the headline: Business Diary: January 9-14. Order Reprints|Today's Paper|Subscribe